Azurite Mine Overview

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2 Azurite Mine Overview Abandoned Underground Gold Mine, Located in North Central WA on USFS Administered Land Northwest of Mazama, Near Harts Pass Recreation Area & Pacific Crest Trail Remote with Poor Access, Steep Terrain Several RTE Species Aquatic and Terrestrial Inventoried Roadless/Non Motorized Management Area High Value for Potential Wilderness Area in Future

3 Azurite Mine Location AZURITE MINE MAZAMA

4 OVERVIEW OF AZURITE MINE FROM TINSON ADIT CADY PASS TAILINGS ~55,000 CY ~4 acres MILL AREA WENATCHEE ADIT WASTE ROCK ~25,000 CY ~1 acre MILL CREEK OFFICE BUILDING

5 Azurite Mine Early History Claims Staked 1916 Azurite Copper Company (renamed Azurite Gold) 1918 to 1931 Underground Development 1934 ASARCO Leased Mine 1934 to TPD Mill and Infrastructure 1936 to 1942 Development, Production ~73, opt gold 1942 ASARCO Removes Equipment

6 Historic Photos 1936

7 Azurite Mine Recent History 1995 Discovery Assessment (USFS) 2002 IAM Open File Report (WA DNR) 2004/2005 CERCLA Site Inspection (USFS/CES) 2005 Reprocessing Study (USFS/CES); PRP Report (USFS) 2006 to 2007 ASARCO Bankruptcy Claim/Settlement 2006 to 2008 EE/CA & Risk Assessment (ASARCO/MFG) 2007 to 2010 Data Gaps/Removal Design (USFS/CES) 2011 Removal Action Activities

8 Final Removal Action Alternative Access Road Improvements / Bridge Replacement (2010) Temporary Access Road Across Mill Creek (2011) Mill Creek Diversion Away from Waste Rock Pile (2011) Onsite Covered Repository (2011) Waste Rock and Mill Area Blended with Tailings Reinforced Stabilized Slope/Repository Toe Berm Multi Layer Cover, HDPE Membrane, and Talus/Rock Cover Physical Hazard Closures (2011) Revegetation (2011) USFS Lead

9 Construction Challenges Weather Conditions (rain, snow, heat)

10 Construction Challenges Weather Conditions (rain, snow, heat) Typical Construction Window (late June early October) Steep Slopes / Difficult Terrain Limited Onsite Staging Areas All Borrow Material from Onsite Remote Access/Logistics/Communication

11

12 2011 Removal Action Summary Turnkey Design/Build Contract Structure CES Prime Contractor Palm Construction Main Subcontractor (Local) Mobilization July 11, weeks late (weather) Continuous Work Schedule, CES and Subs Demobilization September 26, week early

13 OVERVIEW OF AZURITE MINE REMOVAL ACTION STABILIZED SLOPE Construct to retain Repository TAILINGS PILE Contour with WR/Mill Soils, and Construct Repository WASTE ROCK Excavate and Haul to Repository MILL AREA Excavate and Haul to Repository

14 Camp, Equipment and Manpower Remote Camp (internet, phones, running water, flushing toilets, showers, washer/dryer, cook, tents/campers) 3 Excavators 2 Loaders 3 Dozers 2 Off Road, Articulated Haul Trucks Roller Compactor, Water Truck, Misc. Work Trucks Bear Proof Storage Containers Manpower 10 to 20 (Palm/Subs) / 1 to 3 (CES)

15 Equipment

16 Remote Camp Overview

17 Remote Camp Facilities

18 Remote Camp Lodging

19 Remote Camp Fuel Storage

20 Erosion and Sediment Control Run On Ditches Waste Rock / Tailings Silt Fence Borrow Area / Waste Rock Filter Berms Borrow Area / Waste Rock Sedimentation Pond Tailings / Repository

21 Mill Creek Crossing and Diversion Access Waste Rock Pile, and Transport to Repository Three, 48 inch CMPs Temporarily Divert Mill Creek Away From Waste Rock Pile

22 Mill Creek Crossing

23 Borrow Area Development Onsite Source for Screening / 3 Products 2 inch minus Stabilized Slope Fill, Road Bed/Base, Fill Material 40,000+ cubic yards used, more remains onsite 2 inch to 36 inch Repository cover, rocked diversion ditches ~20,000 cubic yards 36 inch plus Misc. Placement, armoring

24 Borrow Area Development

25 Borrow Area Development

26 Underground Working Closures Planned for 5 Closures (4 Adits / 1 Vent) Pre Cut Steel and Culverts Delivered to Site Final Onsite Fabrication Installation with Helicopter and Onsite Welder 4 Closures Burnham, Tinson, and Discovery Adits Discovery Vent Wenatchee Adit Collapsed No Bat Gate Installed

27 Burnham Adit Before

28 Burnham Adit After

29 Tinson Adit Before

30 Tinson Adit After

31 Discovery Adit Before

32 Discovery Adit After

33 Reinforced Stabilized Slope Designed to Stabilize/Retain the Repository Original Design was 15 feet (H) x 15 feet (W) 12 lifts Final Layout was 22 feet (H) x 25 feet (W) 17 lifts Competent Soil Deeper Than Planned Increased Quantities For Borrow Material/Geogrid Onsite QA/QC Testing All Final Tests Met Compaction Requirements (95% of Proctor) 23 days to build Bottom lifts ~ 1.5 days to complete Upper lifts ~ 1 day to complete

34 Reinforced Stabilized Slope Typical

35 Reinforced Stabilized Slope Lift 1

36 Reinforced Stabilized Slope Lift 4

37 Reinforced Stabilized Slope Lift 8

38 Reinforced Stabilized Slope Lift 12

39 Reinforced Stabilized Slope Lifts 14/15

40 Reinforced Stabilized Slope Complete

41 Reinforced Stabilized Slope Complete

42 Waste Rock Excavation and Placement Design Estimate was 22,000 bcy of Waste Rock 16,000 bcy Upper / 6,000 bcy Lower Risk Assessment Cleanup Goal 104 mg/kg Total Arsenic Revised Cleanup Goal 204 mg/kg Total Arsenic Additional Background Soil Sampling Used MTCA Stat 3.0 to Calculate Natural Background In Field Screening with Niton XRF (RPDs 33%) Final Quantities 13,500 bcy Upper WR 2,900 bcy Lower WR

43 Waste Rock Pile Before

44 Waste Rock Pile Removal

45 Waste Rock Pile Removal

46 Waste Rock Pile Final

47 Onsite Repository Overall Slope = 2.5:1 Reinforced Slope and Berm to Stabilize Repository Waste Rock Blended with Tailings to Achieve Slope In sloped Benches Every 9 Vertical Feet to Relieve Precip Repository Cover (Multi Layer) 1. Talus/Rock Cover Top 2. Geogrid oz Nonwoven Geotextile mil HDPE Membrane oz Nonwoven Geotextile 6. Waste Rock/Tailings Bottom

48 Repository Grading Plan

49 Repository Cross Section Detail

50 Tailings Pile Before

51 Tailings Pile Before

52 Tailings Pile Oxidation Profile

53 Repository Benching / Grading

54 Repository Benching / Grading

55 Repository Benching / Grading

56 Repository Benching / Grading

57 Repository Benching / Grading

58 Liner Installation

59 Liner Layers

60 Liner Installation

61 Liner Installation

62 Liner / Cover Installation

63 Liner / Cover Installation

64 Liner / Cover Installation

65 Repository Final

66 Repository Final

67 Repository / Tailings Pile Before

68 Repository Final

69

70 Summary Completed 4 Weeks Ahead of Schedule Field Changes Easily Made with Continuous Oversight & Communication No Health/Safety Concerns 3 Years of Long term O&M Inspections, & Monitoring Cost $2.5M Capital

71 QUESTIONS

72 Extra Slides

73 Upper Mill Creek

74 Lower Mill Creek/Canyon Creek

75 Waste Rock Pile Before

76 Waste Rock Pile Removal

77 Waste Rock Pile Removal

78 Tailings Pile

79 Tailings Pile

80 Mill Area / Office Building

81 Waste Rock Pile

82 Waste Rock Pile

83 CERCLA Site Inspection Review Surface Water Pathway Aquatic Stations (Surface Water, Pore Water, Sediment, & Benthic)

84 Aquatic Stations Canyon Creek Stations Cady Pass Mill Creek Stations Azurite Mine Mill Creek Background Stations

85 CERCLA Site Inspection Review Surface Water Pathway Aquatic Stations (Surface Water, Pore Water, Sediment, & Benthic) Minimal impacts to Surface/Pore Water/Benthic Sediments impacted Near Mine (COCs: As, Cd, Cr, Cu, Ni, Zn) Complete Pathway for Receptors Soil Pathway 17 Test Pits 40 Tailings/WR/Soil Samples (COCs: As, Cu, Hg, and Pb) Tailings/WR ARD Potential ABP as low as 230 t CaCO 3 /Kt Background Soil Elevated with COCs Complete Pathway for Receptors

86 CERCLA Site Inspection Review (cont.) Air Pathway Complete Pathway for Receptors Groundwater Pathway Adit discharge/seeps (3) impacted (COCs: Al, As, Cu, Mn, Zn) Incomplete Pathway for Receptors Topographic Survey of Tailings, Mill Site, and WR Ecological Survey RTE species expected (Bull Trout, Spotted Owl) Engineering Evaluation / Cost Analysis (EE/CA) Recommended

87 Reprocessing Study Four tailings samples Gravity Poor Gold/Sulfide Recovery (14 28%/29 41%) Floatation Poor Gold/Sulfide Recovery (21 35%/16 27%), Excellent Recovery for As, Cu, and Zn. Historic Lime/CN used interferes with floatation tests Better gold recovery (60%) after lime/cn pretreatment Bottom Line Gravity Not economical Floatation Better recovery after pretreatment, but cons not marketable (low gold, high arsenic/base metals).

88 Engineering Evaluation/Cost Analysis Lead by ASARCO (MFG) with USFS/Ecology Oversight Additional Sampling Risk Assessment (Human and Ecological) Human Carcinogenic Risk for Recreational Exposure (Cleanup Goal 104 mg/kg total arsenic) Ecological Multiple Risks and COCs, Source Control Will Mitigate Risks Removal Objectives Isolate Wastes from Human and Ecological Receptors Eliminate Erosion and Mass Failure Potential

89 EE/CA (cont) Recommended Alternative Onsite Consolidation and Closure Place Waste Rock and Mill Soils Over Tailings Pile Construct Retaining Wall at Toe of Tailings Pile 1 foot Soil Cover, then 1 foot Talus/Rock Cover Erosion Controls/Physical Hazard Mitigation Cost Estimate $4.6M Capital $5.7M 30 Yr Net Present Worth

90 Removal Action Data Gaps 2007 Mill Creek Fish Barrier Survey Multiple Fish Barriers, No Fish Within 2.5 Miles

91 Removal Action Data Gaps 2007 Mill Creek Fish Barrier Survey Multiple Fish Barriers, No Fish Within 2.5 Miles Borrow Material Assessment Onsite Talus/Rock Areas

92 Removal Action Data Gaps 2007 Mill Creek Fish Barrier Survey Multiple Fish Barriers, No Fish Within 2.5 Miles Borrow Material Assessment Onsite Talus/Rock Areas Access Road Improvement Assessment Bridge Replacement/Repair, Culverts, and Switchbacks Repository Cover and Geotechnical Assessment Completed with GeoEngineers Recommended 2.5:1 Repository Slope with Retaining Wall Recommended a Multi Layer HDPE Liner, and Talus Cover

93 Removal Action Sequence 2011 Mobilization, Remote Camp and Staging Areas Erosion/Sediment Control Mill Creek Crossing and Diversion Borrow Area Development Underground Working Closures Reinforced Stabilized Slope Construction Waste Rock Excavation and Placement Repository Grading, and Liner/Cover Installation Revegetation/Demobilization

94 2010 Access Road Improvements CES Design, Palm Construction/USFS Bridge Installation Road Widening/Grading Switchback Improvements Culvert Installation

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102

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104 Mill Creek Diversion

105 Mill Creek Diversion

106 Discovery Vent Before

107 Discovery Vent After

108 Reinforced Stabilized Slope Lift 1

109 Reinforced Stabilized Slope Lifts 12/13

110 Azurite Mine Location AZURITE MINE CADY PASS ACCESS ROAD AZURITE MINE LOOKING SOUTH FROM CADY PASS

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